How do I report an RMD given to a non-profit (so not taxable as income), when the non-profit made an error in not notifying IRS of the contribution?

[SweetieJean]

Just be aware that not all nonprofits qualify as IRS charities.

[Cindy0H · Accepted solution]

The nonprofit does not need to notify the IRS. You are referring to a Qualified Charitable Distribution. You will enter the necessary information in your federal return when you enter the 1099R.

To do a Qualified Charitable Distribution, you must actually be 70 1/2 years old on the date of the distribution. If it was not a QCD, then you must enter the 1099-R for the distribution on your tax return as if you received the funds in your account. You can then itemize deductions and claim the deduction as a charitable contribution on your tax return. 

For reporting a Qualified Charitable Distribution, you should have been presented with the Transfer to Charity? (see screenshot) page in the follow-up to entering the Form 1099-R. Simply indicate the amount that was transferred from the IRA directly to the charity.

Tax only asks the charity question if the distribution is from a traditional IRA and you were age 70½ or over.  For other types of accounts or if you were under age 70½ you'll need to report the distribution as a regular charitable contribution deduction on Schedule A.

[SweetieJean]

Also be aware that some states do not recognize QCD's, so you may still owe state taxes.